Bridging Loans FAQ
Bridging Loans FAQ
Bridging loans are one of the most versatile tools in UK property finance, yet they remain widely misunderstood. Many borrowers approach bridging with assumptions based on conventional mortgages — assumptions that do not apply. This FAQ page answers the most common questions we receive about bridging loans, drawn from over twenty years of arranging facilities for property buyers, investors, and developers across the UK.
If your question is not answered here, contact Platinum Global Bridging Finance at our office at 64 Knightsbridge, London. We provide no-obligation initial assessments and indicative terms within 24 hours.
General Questions About Bridging Loans
What is a bridging loan?
A bridging loan is a short-term, property-secured loan designed to provide capital quickly — typically within 5-14 working days. The loan is secured against property (residential, commercial, or land) and is repaid through a defined exit strategy, usually within 1-18 months. Common exit strategies include selling the property, remortgaging onto a conventional mortgage, selling another asset, or completing a development.
How much can I borrow with a bridging loan?
Bridging loans are available from £100,000 to above £25 million, depending on the lender. The loan amount is primarily determined by the value of the security property and the loan-to-value (LTV) ratio offered. Residential bridging typically allows up to 75-80% LTV. Commercial bridging up to 65-70% LTV. Land bridging up to 50-70% LTV depending on planning status. For large bridging loans above £5 million, we access private banks and institutional credit funds.
How long does a bridging loan take to arrange?
Straightforward residential cases can complete in 5-7 working days. Most standard cases complete in 10-14 working days. Complex cases involving commercial property, corporate borrowers, or multiple securities typically take 2-4 weeks. See our fast bridging loans page for more on accelerated timelines.
What is the maximum term for a bridging loan?
Most bridging loans run for 1-18 months, with 6-12 months being the most common term. Some lenders offer terms of up to 24 months for specific scenarios such as development exits or complex probate situations.
What interest rates do bridging loans charge?
Bridging loan interest rates typically range from 0.45% to 1.0% per month (equivalent to approximately 5.4% to 12% per annum). The rate depends on LTV, property type, borrower profile, exit strategy strength, and loan size. First charge bridging is cheaper than second charge bridging, which carries a premium of 0.10-0.20% per month.
Costs and Fees
What fees are involved in a bridging loan?
The typical fee structure includes monthly interest (from 0.45% per month, usually rolled up), a lender arrangement fee (typically 1-2% of the loan amount, often added to the loan), valuation fees (£350-£5,000 depending on property value), legal fees for your solicitor and the lender’s solicitor (£1,500-£5,000 combined), and potentially an exit fee. At Platinum Global, we charge no broker fee on facilities of £500,000 or above.
How is bridging loan interest calculated?
Interest is calculated monthly on the outstanding loan balance. It can be structured in three ways. Rolled up: interest accrues monthly and is added to the loan balance, repaid in full when the bridge exits — no monthly payments required. Retained: the full interest for the agreed term is deducted from the loan advance upfront. Serviced: you make monthly interest payments during the term. Rolled up is the most common structure.
Is a bridging loan more expensive than a mortgage?
On a monthly rate basis, yes. However, the comparison is misleading because a bridging loan is a temporary facility held for months, not years. The total cost of a 6-month bridging loan on a £500,000 property at 0.60% per month is approximately £18,000 in interest — a fraction of the property value and often less than the cost of losing a transaction.
Eligibility and Requirements
What credit score do I need for a bridging loan?
Bridging lenders are significantly more flexible on credit than conventional mortgage lenders. Many specialist lenders will consider borrowers with adverse credit including CCJs, defaults, missed payments, and even previous bankruptcy — provided the property and exit strategy are sound.
Can I get a bridging loan if I am self-employed?
Yes. Unlike conventional mortgages, bridging lenders do not typically require proof of income or affordability assessments for unregulated loans. The assessment is based on the property value and exit strategy.
Can foreign nationals or non-UK residents get bridging loans?
Yes. We arrange bridging loans for foreign nationals, non-UK residents, and international buyers purchasing UK property. See our offshore bridging finance page for more detail.
Can I get a bridging loan through a limited company?
Yes. Limited company and SPV bridging loans are available from most specialist lenders. Newly formed SPVs with no trading history are accepted.
Process and Exit
What is an exit strategy and why does it matter?
An exit strategy is your plan for repaying the bridging loan. It is the single most important factor in the lender’s assessment. Common exit strategies include selling the property, remortgaging onto a conventional mortgage, selling another asset, and development completion and sale. A strong exit strategy results in better rates and higher LTV.
What happens if I cannot repay my bridging loan on time?
If your exit strategy is delayed, most lenders will consider an extension of the bridging term. Extension fees typically apply. If you cannot repay at all, the lender has the right to appoint a receiver and sell the security property. The key is to communicate early if you anticipate a delay.
What is the difference between regulated and unregulated bridging?
A regulated bridging loan is one secured against a property where you or a family member lives or intends to live — governed by the FCA with consumer protections. An unregulated bridging loan is secured against investment property, commercial property, or land — it has fewer regulatory requirements, greater flexibility, and is typically faster to arrange.
Specific Scenarios
Can I use a bridging loan to buy at auction?
Yes — auction bridging is one of the most common uses. We recommend arranging an AIP before the auction.
Can I use a bridging loan to break a property chain?
Yes — chain break bridging allows you to complete your purchase independently of a failed or delayed sale.
Can I get a bridging loan on an unmortgageable property?
Yes. Properties without a kitchen, bathroom, central heating, or with structural issues are not mortgageable by conventional lenders. Bridging lenders will lend against these properties at their current value.
Can I use bridging finance to raise capital against a property I already own?
Yes. A bridging loan can be taken against property you already own — either as a first charge or as a second charge behind an existing mortgage.
Working with Platinum Global
Does Platinum Global charge a broker fee?
No broker fee on facilities of £500,000 or above.
How do I get started?
Contact us with details of the property, the amount you need, your proposed exit strategy, and your timeline. We deliver indicative terms within 24 hours. Our office is at 64 Knightsbridge, London SW1X 7JF.
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About Us
Platinum Global Bridging Finance is a distinguished high-net-worth finance broker. We specialize in providing tailored financial solutions, including Property Bridging Finance, Development Finance, Single Stock Loans, Margin Stock Loan, Crypto Finance, Crypto Backed Loans and Commercial Property Finance tailored to meet the diverse needs of our clientele seeking robust financial lending solutions.
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